Online brokerages TradeKing and Zecco, which were both created six years ago and have placed social media at the forefront of their strategy, have agreed to merge their businesses.
They aim to create a brand that will directly challenge the “big five” brokerages - Schwab, Fidelity, TD Ameritrade, Etrade and Scottrade – by offering the independent investor “a better deal,” the brokerages said in a statement.
The merger makes sense for several reasons. As two of the best-known deep discount firms, TradeKing and Zecco compete for many of the same customers. In addition to their innovative work in the social media sphere, they are also both recognized for their low commissions and solid web-based self-service, notes James McGovern, VP for consulting services at Corporate Insight. "Perhaps the biggest challenge will be deciding how to ultimately integrate their two separate websites into one platform that truly rivals what industry leaders provide," he says.
Meanwhile, Don Montanaro, CEO, TradeKing, notes that the two brokerages have been driving for the same purpose for a number of years: "to challenge the status quo in financial services, and to deliver a better, fairer deal to the independent investor,” he said in a video message.
Zecco CEO Michael Raneri, added: “Both TradeKing and Zecco are known industry disruptors. We helped drive brokerage fees to record lows, gave industry investors powerful tools once available only to institutional investors and introduced […] greater transparency, accessibility and accountability through social networking and social media.”
For all investors, the merger provides an “alternative to the faceless mega firm,” Raneri claimed.
With the merger, the brokerages will nearly double their client base to a combined 500K accounts, nearing the account sizes of OptionsXpress and ThinkorSwim before their acquisitions by Schwab and TD Ameritrade respectively.
TradeKing clients will gain access to Zecco’s forex trading capabilities and mobile trading apps for both the iPhone and Android. Zecco clients will gain access to TradeKing’s options trading tools, educational tools and fixed income trading capabilities.
Zecco’s social media strategy includes the launch last year of “Wall Street,” which it claims to be the first Facebook application to offer free real-time stock quotes and charts. The app also allows users to trade directly from Facebook through a compact trade ticket without ever having to leave the popular social networking site.
TradeKing also has actively promoted innovative social media strategies since its inception in December 2005, including its Trader Network forums and blogs, which allow traders to ask questions and express their ideas and interests.
[For more on the social media strategies of TradeKing, Zecco and other innovative brokerages, Read: 6 Brokerages Leading the Way in Social Media to learn more.]
TradeKing’s CEO Don Montanaro and Zecco’s CEO, Michael Raneri, have known each other since the 7th grade. They both attended the same middle and high schools, worked together at the discount brokerage firm Quick & Reilly and note that they have stayed friends ever since even as their careers took them in different directions and lead to them heading competing brokerages.
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio